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Monday, July 4, 2016

A major complaint of patients is they are unable to obtain accurate costs for their health care and visits to the hospital.

Hospitals also have good reason to join patients and complain about predictive pricing. A typical explanation of benefits (EOB) is laden with misleading information. Furthermore it makes no sense, except to perhaps an accountant or health administrator on the inside. A Medicare EOB is quite different than one from a private insurer or a managed care program. Furthermore there are no public documents that relate true costs for each service to the amounts on explanation of benefits.

Patients must insist on receiving a full explanation of benefits and questioning the numbers as well as how they are derived. The present system is corrupted and every patient should become a "whistleblower"

Many methods exist to pay for provider services, including discounted fee-for-service charges,
and capitation. Listed below are some common terms used in insurance plans to define
payment obligations on the part of a patient, provider of services, or the insurance company.

Capitation A payment system in which health care providers (physicians, hospitals,
pharmacists, etc.) receive a fixed payment per member per month (or year), regardless
of how many or few services the patient uses.

Coinsurance An insurance policy provision under which both the insured person and the
insurer share the covered charges in a specified ratio (e.g., 80% by the insurer and 20% by
the enrollee).

Co-payment A cost-sharing arrangement in which the managed care enrollee pays a
specified flat amount for a specific service (such as $15.00 for an office visit or $10.00 for
each prescription drug). It does not vary with the cost of the service, unlike coinsurance
which is based on some percentage of charges.

Deductibles Amounts required to be paid by the insured under a health insurance
contract before benefits become payable.

Discounted Fee-For-Service An agreed-upon rate for service between the provider
and payer that is usually less than the provider’s full fee. This may be a fixed amount per
service or a percentage discount. Providers generally accept such contracts because they
represent a means of increasing their volume or reducing their chances of losing volume.

Fee-for-Service (FFS) Reimbursement Payment in specific amounts for specific
services rendered. Payment may be made by an insurance company, the patient, or a
government program such as Medicare or Medicaid. The form of payment is in contrast to
payment retainer, salary, or other contract arrangements (to Physicians or other suppliers
of service); and premium payment or membership fee for insurance coverage (by the patient).

Out-of-Pocket Expense The amount not reimbursed by insurance coverage and paid by
the patient such as co-payments, deductibles and premiums.

Pharmacy Benefit Coverage of prescription drugs by an insurance company. Often,
beneficiaries will have an identification card designating their eligibility and will have to pay
partially for the drug in the form of co-payments, deductibles, or coinsurance. Also referred
to as a “Prescription Drug Benefit.” This benefit may be offered through a company other
than your health insurer.

Premium The amount paid to an insurer for providing coverage, typically paid on a periodic
basis (monthly, quarterly, etc.).

Prevailing Charge This is a fee based on the customary charges for covered medical
insurance services. In Medicare payments for services or items, it is the maximum
approved charge allowed.

Reasonable Charge A methodology used by Medicare to determine reimbursement for
items or services not yet covered under any fee schedule. Reasonable charges are usually
determined by the lowest of the actual charge, the prevailing charge in the locality, the
physician’s customary charge, or the carrier’s usual payment for comparable services.
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Reasonable Cost A methodology used by Medicare to determine reimbursement for
items and services that takes into account both direct and indirect costs of providers
such as hospitals, as well as certain Medicare HMOs and competitive Medical Plans.

Reimbursement Reimbursement Refers to the actual payments received by providers or
patients for benefits covered under an insurance plan.

Third-Party Payment (a) Payment by a financial agent such as an HMO, insurance
company, or government rather than direct payment by the patient for medical-care
services. (b) The payment for health care when the beneficiary is not making payment, in
whole or in part, on his/her own behalf.

Usual, Customary, and Reasonable (UCR) Charges Private health insurance offers
the basis for reasonable-charge reimbursement of physicians. This approach was developed
before the introduction of Medicare and was adopted by Medicare. “Usual” refers to the
individual physician’s fee profile, equivalent to Medicare’s “Customary” charge screen.
“Customary,” in this context, refers to a percentile of the pattern of charges made by
physicians in a given locality. “Reasonable” is the lesser of the usual or customary screens.

Contrary to opinions of most pundits, the American health system is strong and robust. The strength can be measured by the survival of any system, at all given the proclivity for congress to make law that has little to do with enhancing patient care.

Because our health system(s) are so diverse is it's main strength. When one segment gets out of balance another one rises to the occassion. Just recently the head of the Veterans Administration forecast that many of their beneficiaries would be sent out to civilian providers in order to meet the demand of primary and specialty care. (they must not be aware of the dire situation of civilian primary care givers.)

At its 2016 ANI event, the Healthcare Financial Management Association on Sunday named 150 healthcare providers as leaders for adopting best practices when it comes to patient financial communications, an important benchmark as patient financial responsibility rises.

The award program was developed in 2013 to call attention to providers who excel at communications around billing, costs and payment options.

"Adopting the best practices promotes trust and helps prevent misunderstandings between patients and healthcare providers," said HFMA President and CEO Joseph J. Fifer, in a statement. "In a time when patients are paying more out of pocket for their health care, clear communication about financial matters is crucial. We encourage all provider organizations to seek Adopter recognition."

The organization said 85 hospitals and 68 clinics earned the recognition, though the bulk of the awardees were part of nine major healthcare systems. Those are Carolinas HealthCare, the Duke University Health System, Essentia Health, the Geisinger Health System, Intermountain Healthcare, Novant Health, St. Luke's Health System, The Metro Health System of Cleveland and UAB Medicine. Two critical access hospitals, Henry County Health Center in Mount Pleasant, Iowa, and Maury Regional Medical Center in Columbia, Tennessee, earned recognition.

According to Rodney Williams, senior manager of patient revenue management organization at Duke University Health System, the system makes it priority to understand how the cost of care affects its patients.

"We perform a comprehensive analysis to make sure that patients are not going to be surprised by the costs they are responsible for on the back end," he said in a statement.

Providers must attest to a range of patient communication best practices to earn the adopter status, the HFMA said.

Disclaimer

The opinions in this blog or other forms of social media are solely that of Gary M. Levin M.D. Dr. Levin has no financial interests in any medical devices which are discussed or which appear in the blog. Commentary taken from other sources are either quoted or referenced with attribution. Dr Levin does not endorse, nor give financial support to any political organizations.